Sherwin-Williams Cuts Its Outlook as Soft Demand and Costs Hurt Profits
Sherwin-Williams (SHW) shares declined Tuesday after the maker of paints and coatings missed profit forecasts and cut its outlook on soft demand and higher costs.
The company reported second-quarter adjusted earnings per share of $3.38, down 8.6% from a year ago and below the consensus of analysts surveyed by Visible Alpha. Revenue rose 0.7% to $6.31 billion, which was ahead of estimates.
Sales at the company's Performance Coatings Group dropped 0.3% to $1.80 billion, mainly on lower prices. They were down 4.1% to $809.4 million at the Consumer Brands Group because of a drop in do-it-yourself work demand and currency fluctuations. Higher prices helped Paint Store Group sales rise 2.3% to $3.70 billion.
Selling, General, & Administrative expenses grew 9% to $2.01 billion, which the company blamed on a 'broader restructuring initiative related to softer demand, sooner than anticipated building related costs and heightened growth investment related to incremental competitive opportunities.'
CEO Heidi Petz said the demand environment 'remained choppy,' and warned that the company expects the slowdown in the quarter 'will continue if not deteriorate in the second half of the year.'
Sherwin-Williams said it now sees full-year adjusted EPS in the range of $11.20 to $11.50, compared to its earlier outlook of $11.65 to $12.05.
Shares of Sherwin-Williams were down about 3% in recent trading, dragging them into negative territory for the year.
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